The short covering rally which began earlier this week in
the natural gas market came to an abrupt halt on Thursday as the market was
heavily sold.
The spot September 15 contract on Thursday following release
of the weekly storage report losing .144 or 4.9% to settle at 2.787.
Daily settle on Thursday back under 10 and 40 day
moving average support turns the near term trend back down with the lower-2.700
level again becoming primary support.
A breakout under lower-2.700 support will trigger a triangle
pattern on the weekly chart which points toward the 2.100-2.200 level as
a downside measuring objective for completion.
The 10 and 40 day moving averages broken as support
yesterday now becomes the first area of upside resistance between
2.815-2.820. Longer term resistance is the 2.934 weekly high extending up
to the 200 day moving average at 3.020.
Bottom line – The bears are back in control with a bearish
breakout from the 14 week sideways range expected in upcoming trade.
Technical Indicators: Moving Average Alignment –
Bearish
Long
Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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